Disaster Relief
Governmentwide Framework Needed to Collect and Consolidate Information to Report on Billions in Federal Funding for the 2005 Gulf Coast Hurricanes Gao ID: GAO-06-834 September 6, 2006Hurricane Katrina devastated the Gulf Coast region of the United States and caused billions of dollars in damage. Hurricanes Rita and Wilma further exacerbated damage to the region. The Federal Emergency Management Agency (FEMA), within the Department of Homeland Security (DHS), was tasked with the primary role of managing the federal relief and recovery efforts. This review was performed under the Comptroller General's authority because of widespread congressional interest in the response to this disaster. GAO examined whether the federal government was adequately tracking and reporting on the use of the funding provided in the four emergency supplemental appropriations acts enacted as of June 2006. GAO analyzed the emergency supplemental appropriations acts and conference reports, reviewed FEMA's required weekly reports, and interviewed federal agency officials.
FEMA's required weekly reports to the Appropriations Committees on the use of funds it received do not provide timely information from a governmentwide perspective because FEMA does not have a mechanism to report on the financial activity of the agencies performing work on its behalf. Specifically, when FEMA tasks another federal agency through a mission assignment, FEMA records the entire amount upfront as an obligation, whereas the performing agency does not record an obligation until a later date, thereby overstating reported governmentwide obligations. The opposite is true for expenditures. The performing agency expends the funds, but then bills FEMA for reimbursement. FEMA does not record the expenditure until it has received the bill and reviewed it, thereby understating reported governmentwide expenditures. As a result, while FEMA is reporting as required, from a governmentwide perspective, FEMA's reported obligations are overstated and expenditures are understated. The federal government also does not have a governmentwide framework or mechanisms in place to collect and consolidate information from the individual federal agencies that received emergency supplemental appropriations for hurricane relief and recovery efforts and report on this information. About $88 billion has been appropriated to 23 different federal agencies through four emergency supplemental appropriations acts; however, no one agency or central collection point exists to compile and report on how these funds are being spent. Decision makers need this consolidated information to determine how much federal funding has been spent and by whom, whether more may be needed, or whether too much has been provided. The ability to separately track and report on these funds is important to help ensure better accountability and clearly identify the status of funding provided in direct response to these hurricanes at both the individual federal agency level as well as the governmentwide level. Also, it is important to provide additional transparency so that hurricane victims, affected states, as well as American taxpayers, know how these funds are being spent.
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Director: Team: Phone:GAO-06-834, Disaster Relief: Governmentwide Framework Needed to Collect and Consolidate Information to Report on Billions in Federal Funding for the 2005 Gulf Coast Hurricanes
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and Consolidate Information to Report on Billions in Federal Funding
for the 2005 Gulf Coast Hurricanes' which was released on September 6,
2006.
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
September 2006:
Disaster Relief:
Governmentwide Framework Needed to Collect and Consolidate Information
to Report on Billions in Federal Funding for the 2005 Gulf Coast
Hurricanes:
Tracking Hurricane Funding:
GAO-06-834:
GAO Highlights:
Highlights of GAO-06-834, a report to congressional committees
Why GAO Did This Study:
Hurricane Katrina devastated the Gulf Coast region of the United States
and caused billions of dollars in damage. Hurricanes Rita and Wilma
further exacerbated damage to the region. The Federal Emergency
Management Agency (FEMA), within the Department of Homeland Security
(DHS), was tasked with the primary role of managing the federal relief
and recovery efforts. This review was performed under the Comptroller
General‘s authority because of widespread congressional interest in the
response to this disaster. GAO examined whether the federal government
was adequately tracking and reporting on the use of the funding
provided in the four emergency supplemental appropriations acts enacted
as of June 2006. GAO analyzed the emergency supplemental appropriations
acts and conference reports, reviewed FEMA‘s required weekly reports,
and interviewed federal agency officials.
What GAO Found:
FEMA‘s required weekly reports to the Appropriations Committees on the
use of funds it received do not provide timely information from a
governmentwide perspective because FEMA does not have a mechanism to
report on the financial activity of the agencies performing work on its
behalf. Specifically, when FEMA tasks another federal agency through a
mission assignment, FEMA records the entire amount upfront as an
obligation, whereas the performing agency does not record an obligation
until a later date, thereby overstating reported governmentwide
obligations. The opposite is true for expenditures. The performing
agency expends the funds, but then bills FEMA for reimbursement. FEMA
does not record the expenditure until it has received the bill and
reviewed it, thereby understating reported governmentwide expenditures.
As a result, while FEMA is reporting as required, from a governmentwide
perspective, FEMA‘s reported obligations are overstated and
expenditures are understated.
The federal government also does not have a governmentwide framework or
mechanisms in place to collect and consolidate information from the
individual federal agencies that received emergency supplemental
appropriations for hurricane relief and recovery efforts and report on
this information. About $88 billion has been appropriated to 23
different federal agencies through four emergency supplemental
appropriations acts (see figure below); however, no one agency or
central collection point exists to compile and report on how these
funds are being spent. Decision makers need this consolidated
information to determine how much federal funding has been spent and by
whom, whether more may be needed, or whether too much has been
provided. The ability to separately track and report on these funds is
important to help ensure better accountability and clearly identify the
status of funding provided in direct response to these hurricanes at
both the individual federal agency level as well as the governmentwide
level. Also, it is important to provide additional transparency so that
hurricane victims, affected states, as well as American taxpayers, know
how these funds are being spent.
Figure: Funding Received by the Federal Agencies in Emergency
Supplemental Appropriations Acts:
[See PDF for Image]
Source: GAO analysis of Pub. L. No. 109-61, Pub. L. No. 109-48, and
Pub. L. No. 109-234.
[End of Figure]
What GAO Recommends:
GAO makes four recommendations to DHS to improve the information on the
status of hurricane relief funds provided in FEMA‘s weekly reports. GAO
also recommends that the Office of Management and Budget (OMB) take
action to improve transparency and accountability regarding the status
of hurricane-related funding at the governmentwide level. DHS and OMB
concurred with the recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-834].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact McCoy Williams at (202)
512-9095 or williamsm1@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
The Government Does Not Have a Framework in Place to Collect and
Consolidate Information to Report on Hurricane-Related Funding:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Reporting Requirements Included in the Four Emergency
Supplemental Appropriations Acts:
Appendix III: Comments from the Department of Homeland Security:
Appendix IV: Comments from the Office of Management and Budget:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Emergency Supplemental Funding Received by Federal Agencies in
the Four Emergency Supplemental Appropriations Acts as of June 2006
Related to Gulf Coast Hurricanes:
Table 2: Mission Assignment Obligations and Expenditures Reported by
FEMA for Hurricanes Katrina, Rita, and Wilma, as of March 29, 2006:
Figure:
Figure 1: Funding and Reimbursement Process Related to FEMA Issuing
Mission Assignments to Performing Agencies:
Abbreviations:
COE: Army Corps of Engineers:
DHS: Department of Homeland Security:
DOD: Department of Defense:
FEMA: Federal Emergency Management Agency:
HUD: Department of Housing and Urban Development:
IPAC: Intra-Governmental Payment and Collection:
NRP: National Response Plan:
OMB: Office of Management and Budget:
United States Government Accountability Office:
Washington, DC 20548:
September 6, 2006:
Congressional Committees:
Hurricane Katrina struck the Gulf Coast of the United States on August
29, 2005. It devastated the region and caused billions of dollars in
damage. The hurricane affected about 1.5 million people located within
approximately 90,000 square miles spanning Louisiana, Mississippi, and
Alabama, and was the worst natural disaster in our nation's history in
geographic scope, extent and severity of destruction and damage, and
the number of persons displaced from their homes. Shortly after
Hurricane Katrina made landfall, Hurricanes Rita and Wilma followed,
further exacerbating damage to the Gulf Coast region. In response to
these events, the Congress has provided nearly $88 billion for relief
and recovery through four emergency supplemental appropriations acts
through the end of June 2006.[Footnote 1]
As part of its mission under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act),[Footnote 2] as reflected in
the National Response Plan (NRP),[Footnote 3] the Federal Emergency
Management Agency (FEMA), within the Department of Homeland Security
(DHS), was tasked with the primary role of managing the federal relief
and recovery efforts within the affected region. The first emergency
supplemental appropriation act was enacted 4 days after Hurricane
Katrina struck the Gulf Coast and provided over $10 billion. The second
emergency supplemental appropriation act was enacted 6 days after the
first emergency supplemental appropriation act and provided
significantly more funding--$50 billion--to FEMA for its Disaster
Relief Fund and required the Secretary of Homeland Security to provide
weekly reports[Footnote 4] to the Committees on Appropriations
detailing the allocation and obligation of these amounts. The Congress
later called for FEMA to also report on expenditures over $50 million,
among other information.
In creating these reporting requirements, the Congress sent a clear
message that it wanted to know how these funds were being spent and
have updated information on a weekly basis. These reports are publicly
available and at the time of this report were being posted to the House
Committee on Appropriations website.[Footnote 5] In December 2005, when
the Congress rescinded $23.4 billion from FEMA's Disaster Relief Fund,
FEMA had obligated about $25 billion, or 42 percent, of the $60 billion
it received in the first two emergency supplemental appropriations.
With this rescission, the Congress distributed the funds as direct
appropriations to other federal agencies. As of June 2006,
approximately $88 billion has been provided to 23 federal
agencies[Footnote 6] for the relief work through four emergency
supplemental appropriations acts.
We currently have a large body of ongoing work to address preparation,
response, recovery, and rebuilding efforts related to the hurricanes
that devastated the Gulf Coast region. Due to widespread congressional
interest in these subjects, our work is being completed under the
Comptroller General's authority to conduct evaluations on his own
initiative. Topics of reports already issued include (1) contract
management; (2) accounting for international assistance; (3) the
adequacy of internal controls to prevent fraud and abuse; and (4) the
military's response to catastrophic natural disasters.[Footnote 7] We
are sending you this report on the tracking of hurricane relief funding
because of your interest in and responsibility for oversight of matters
related to the hurricane relief and recovery efforts. Our work focused
on the funds designated for hurricane relief and recovery in the four
emergency supplemental appropriations acts enacted as of June 2006. Our
objective was to determine whether the federal government was
adequately tracking and reporting on the use of this funding. To
accomplish this objective, we reviewed the four emergency supplemental
acts to determine which federal agencies were receiving appropriations,
how much each was receiving, what the funds were intended for, and
whether any reporting requirements were specified. Because the second
supplemental, which provided $50 billion to FEMA, required FEMA to
report to the Committees on Appropriations on a weekly basis on the use
of these funds,[Footnote 8] we reviewed FEMA's weekly reports to
determine whether the information provided was timely and useful. We
limited our review of these reports to certain aspects of them that
have governmentwide implications. Specifically, our review of FEMA's
weekly reports focused on the obligations and expenditures reported for
mission assignments[Footnote 9] that were issued to agencies performing
disaster relief work related to the Gulf Coast hurricanes on behalf of
FEMA. The obligation and expenditure information we present in this
report was obtained from FEMA and certain other federal agencies. To
assess the reliability of the data, we interviewed officials
knowledgeable about the data included in the reports and what the data
represented, and determined that the data were sufficiently reliable
for the purposes of this report. Additional details on our scope and
methodology are presented in appendix I. We conducted our work from
October 2005 through June 2006 in accordance with generally accepted
government auditing standards.
Results in Brief:
The federal government is not adequately tracking and reporting, on a
governmentwide basis, on the use of the $88 billion in hurricane relief
and recovery funds provided thus far to 23 federal agencies in the four
emergency supplemental appropriations acts. FEMA, which initially
received $60 billion for hurricane relief, is required to report weekly
to the House and Senate Appropriations Committees on the use of funds
it received; however, these reports do not provide timely information
from a governmentwide perspective because FEMA does not have a
mechanism in place to report on the financial activity of the agencies
performing work on its behalf through mission assignments.
Specifically, when FEMA tasks another federal agency through a mission
assignment, which is similar to an interagency agreement to provide
goods and services, FEMA records the entire amount upfront as an
obligation in its accounting system and reports these amounts to the
Congress; whereas the agency performing the task for FEMA does not
record an obligation until a later date, thereby overstating reported
governmentwide obligations. For example, FEMA initially reported
mission assignment obligations issued to the Department of Defense
(DOD) related to Hurricane Katrina in the amount of about $2.2 billion.
While this amount was eventually reduced to about $1.1 billion, DOD had
only actually incurred about $481 million in obligations over the same
period of time. In addition, based on information provided by the Coast
Guard, FEMA had recorded obligations of nearly $192 million as of April
2006; however, at that time the Coast Guard had only actually incurred
about $85 million in obligations.
The opposite is true for expenditures. The performing agency expends
the funds, but then has to bill FEMA for reimbursement. This may happen
months after the actual payment is made by the performing agency. FEMA
does not include the expenditure in its reports to the Congress until
it has received the bill from the performing agency, reviewed it, and
recorded the expenditure in its accounting system, thereby understating
reported governmentwide expenditures. For example, the U.S. Forest
Service had not billed FEMA for any of its work done under mission
assignments even though the agency reported that it had made close to
$170 million in expenditures related to its Hurricane Katrina mission
assignments as of January 31, 2006. Accordingly, FEMA reported no
expenditures for this agency in its weekly report since FEMA had not
yet approved any billings. A user of FEMA's report could incorrectly
infer that a particular agency has received tasks from FEMA but has not
spent any of the funds, either because the agency has not billed FEMA
or because the bill has not been reviewed and recorded by FEMA. As a
result, while FEMA is reporting as required, from a governmentwide
perspective, FEMA's reported obligations are overstated and
expenditures are understated. Depending on the stage of the process,
the differences could be significant.
Further, from a governmentwide perspective, we found that there is no
one agency or central collection point that exists to compile and
report on how the approximately $88 billion provided through four
emergency supplemental appropriations acts are being spent. Although
each federal agency is responsible for tracking the funds it received,
obligations incurred, and funds expended through its own internal
tracking systems, no mechanisms are in place to consolidate and report
on this information. Without a framework and mechanisms in place to
collect and consolidate information from these agencies on a
consistent, periodic basis, it will be difficult for decision makers to
determine how much federal funding has been spent and by whom, whether
more may be needed, or whether too much has been provided. The ability
to separately track and report on these funds is important to help
ensure better accountability and clearly identify the status of funding
provided in direct response to these hurricanes at both the individual
federal agency level as well as the governmentwide level. Also, it is
important to provide additional transparency so that hurricane victims,
affected states, as well as American taxpayers, know how these funds
are being spent. At the same time, we recognize the substantial
challenge in balancing the need to get money out quickly to those who
are actually in need and sustaining public confidence in disaster
programs by taking all possible steps to minimize fraud and abuse.
While there are some reporting requirements included in the emergency
supplemental appropriations acts, overall reporting requirements differ
greatly. Further, the reporting requirements do not call for
consolidating information on obligations and expenditures on a
governmentwide basis and, therefore, do not facilitate governmentwide
reporting on hurricane-related spending.
We make four recommendations to FEMA to improve the information on the
status of hurricane relief funds from a governmentwide perspective
provided in FEMA's weekly reports to the Appropriations Committees.
Given the magnitude of the emergency supplemental federal funding
provided thus far--more than double DHS's annual discretionary budget
authority--in response to the Gulf Coast hurricanes and the need for
additional transparency and accountability, we are also recommending
that the Office of Management and Budget (OMB) establish a framework
for governmentwide reporting and either collect and consolidate
information on the status of the hurricane-related funding itself or
designate another appropriate agency, such as the Department of the
Treasury, to do so and report to the Appropriations Committees on a
periodic basis.
We provided a draft of this report to DHS and OMB for comment. DHS and
OMB concurred with our recommendations, and their comments, along with
our evaluation, are discussed in the Agency Comments and Our Evaluation
section of this report. The comments are also reprinted in their
entirety in appendixes III and IV, respectively. We also provided
excerpts of the report to those agencies cited in examples for their
review. They provided technical comments, and we made revisions as
appropriate.
Background:
On August 29, 2005, Hurricane Katrina devastated the Gulf Coast region,
causing human casualties and billions of dollars in damage. During
major disasters such as this, the Stafford Act authorizes the federal
government to assist in saving lives, reducing human suffering,
mitigating the effects of lost income, and helping repair or rebuild
certain damaged facilities. As of June 2006, nearly $88 billion was
appropriated by the Congress through four emergency supplemental
appropriations for relief and recovery efforts related to the recent
Gulf Coast hurricanes. FEMA, the DHS component statutorily charged with
administering the provisions of the Stafford Act,[Footnote 10] uses
appropriations made to the Stafford Act's Disaster Relief Fund to
assist relief and recovery efforts.
Funding Provided for the Hurricane Relief Effort:
Initially, in September 2005, the Congress appropriated $62.3 billion
for the response and recovery effort related to Hurricane Katrina in
two emergency supplemental appropriations acts.[Footnote 11] Of that
amount, (1) FEMA received $60 billion for the Disaster Relief Fund, (2)
DOD received $1.9 billion, and (3) the Army Corps of Engineers (COE), a
DOD agency, received $400 million. As of late December 2005, FEMA
reported that it had obligated about $25 billion, or 42 percent, of the
$60 billion it had received. In December 2005, the Congress provided
additional funds for the recovery effort related to the 2005 Gulf Coast
hurricanes through a third emergency supplemental appropriation
act.[Footnote 12] This legislation provided approximately $29 billion
to 20 federal agencies and also rescinded approximately $23.4 billion
from the $60 billion appropriated to FEMA's Disaster Relief Fund in
September 2005. The third emergency supplemental appropriation resulted
in a net increase of about $5.5 billion in total direct federal funding
for hurricane relief and recovery and the fourth resulted in a net
increase of approximately $20.1 billion. Table 1 shows the agencies
that received direct funding through the four emergency supplemental
appropriations acts.
Table 1: Emergency Supplemental Funding Received by Federal Agencies in
the Four Emergency Supplemental Appropriations Acts as of June 2006
Related to Gulf Coast Hurricanes:
Dollars in millions.
Agency: FEMA Disaster Relief Fund;
First: $10,000.0;
Second: $50,000.0;
Third: $(23,409.3)[A];
Fourth: $5,962.0[B];
Total: $42,552.7;
Percentage of total: 48.4%.
Agency: DOD;
First: 500.0;
Second: 1,400.0;
Third: 5,753.8;
Fourth: 1,487.7[C];
Total: 9,141.5;
Percentage of total: 10.4.
Agency: COE;
First: 0;
Second: 400.0;
Third: 2,899.6;
Fourth: 3,685.9[D];
Total: 6,985.5;
Percentage of total: 8.0.
Agency: Department of Housing and Urban Development (HUD);
First: 0;
Second: 0;
Third: 11,890.3;
Fourth: 5,200.0;
Total: 17,090.3;
Percentage of total: 19.4.
Agency: Department of Transportation;
First: 0;
Second: 0;
Third: 2,798.1;
Fourth: 702.4[E];
Total: 3,500.5;
Percentage of total: 4.0.
Agency: Department of Education;
First: 0;
Second: 0;
Third: 1,600.0;
Fourth: 285.0;
Total: 1,885.0;
Percentage of total: 2.1.
Agency: Department of Agriculture (excluding U.S. Forest Service);
First: 0;
Second: 0;
Third: 1,038.1[F, G];
Fourth: 132.4;
Total: 1,170.5;
Percentage of total: 1.3.
Agency: Department of Health and Human Services;
First: 0;
Second: 0;
Third: 640.0;
Fourth: 12.0;
Total: 652.0;
Percentage of total: 0.7.
Agency: Department of Veterans Affairs;
First: 0;
Second: 0;
Third: 592.7;
Fourth: 585.9[H];
Total: 1,178.6;
Percentage of total: 1.3.
Agency: Small Business Administration;
First: 0;
Second: 0;
Third: 446.0;
Fourth: 542.0;
Total: 988.0;
Percentage of total: 1.1.
Agency: DHS (excluding FEMA Disaster Relief Fund);
First: 0;
Second: 0;
Third: 285.1;
Fourth: 662.0;
Total: 947.1;
Percentage of total: 1.1.
Agency: Department of Justice;
First: 0;
Second: 0;
Third: 229.0;
Fourth: 8.5;
Total: 237.5;
Percentage of total: 0.3.
Agency: Department of Labor;
First: 0;
Second: 0;
Third: 125.0;
Fourth: 16.0;
Total: 141.0;
Percentage of total: 0.2.
Agency: Armed Forces Retirement Home;
First: 0;
Second: 0;
Third: 20.8[I];
Fourth: 221.0[I];
Total: 241.8;
Percentage of total: 0.3.
Agency: U.S. Forest Service;
First: 0;
Second: 0;
Third: 57.0;
Fourth: 20.0;
Total: 77.0;
Percentage of total: 0.1.
Agency: General Services Administration;
First: 0;
Second: 0;
Third: 38.0;
Fourth: 37.0;
Total: 75.0;
Percentage of total: 0.1.
Agency: Environmental Protection Agency;
First: 0;
Second: 0;
Third: 8.0;
Fourth: 13.0;
Total: 21.0;
Percentage of total: 0.0.
Agency: Six other agencies;
First: 0;
Second: 0;
Third: 492.7;
Fourth: 527.0[B, F, J];
Total: 1,019.7;
Percentage of total: 1.2.
Total;
First: $10,500.0;
Second: $51,800.0;
Third: $5,504.9;
Fourth: $20,099.8;
Total: $87,904.7;
Percentage of total: 100.0%.
Sources: GAO analysis of Pub. L. No. 109-61, Pub. L. No. 109- 62, Pub.
L. No. 109-148, and Pub. L. No. 109-234.
[A] The third emergency supplemental appropriation act rescinded
approximately $23.4 billion from the $60 billion appropriated to FEMA's
Disaster Relief Fund in the first two emergency supplemental
appropriations acts.
[B] The fourth emergency supplemental appropriation act transferred to
the Social Security Administration $38 million of the $6 billion
appropriated to FEMA's Disaster Relief Fund in this act.
[C] The amount of funding provided to DOD in the fourth emergency
supplemental appropriation act excludes $169.5 million that was
rescinded in this legislation.
[D] The amount of funding provided to COE in the fourth emergency
supplemental appropriation act excludes $15 million that was rescinded
in this legislation.
[E] The amount of funding provided to the Department of Transportation
was offset by a reduction to the Highway Trust Fund.
[F] The amount of funding provided to the Department of Commerce in the
fourth emergency supplemental appropriation act includes $38 million
transferred from the amount provided to the Department of Agriculture
in the third emergency supplemental appropriation act. This amount is
excluded from the funding provided in the third emergency supplemental
appropriation act.
[G] The total amount of funding provided to the Department of
Agriculture in the third emergency supplemental appropriation act
includes $45 million appropriated to the Department of Agriculture to
subsidize loans in an amount not to exceed the loan authority limit of
$1.55 billion. Also, the total includes $404 million of the funds for
the Department of Agriculture that were designated to be used from the
funds of the Commodity Credit Corporation, a federal corporation within
the Department of Agriculture.
[H] The amount of funding provided to the Department of Veterans
Affairs in the fourth emergency supplemental appropriation act excludes
$198.3 million that was rescinded in this legislation.
[I] The amount of funding provided to the Armed Forces Retirement Home
in the fourth emergency supplemental appropriation act includes $45
million transferred from the amount provided to the agency in the third
emergency supplemental appropriation act. This amount is excluded from
the funding provided in the third emergency supplemental appropriation
act.
[J] The amount of funding provided to the Department of the Interior
excludes $9 million provided for drought emergency assistance.
[End of table]
FEMA Uses Federal Agencies to Provide Assistance on Its Behalf:
FEMA has authority under the Stafford Act to issue an order, called a
mission assignment, to other federal agencies. A mission assignment is
a tasking issued by FEMA that directs other federal agencies and
components of DHS, or "performing agencies," to support overall federal
operations pursuant to, or in anticipation of, a Stafford Act
declaration. Once the mission assignment is issued and approved, the
mission assignment document is FEMA's basis for obligating the portion
of FEMA's funds allocated to the assigned relief and recovery effort.
From a federal agency standpoint, the mission assignment provides the
recipient agency reimbursable budgetary authority, not the actual
transfer of funds, to perform the agreed upon work. Among other things,
mission assignments include a description of work, an estimate of the
dollar amount of work to be performed, completion date for the work,
and authorizing signatures. Mission assignments may be issued for a
variety of tasks, such as search and rescue missions or debris removal,
depending on the performing agencies' areas of expertise.
After the agencies perform work under a mission assignment (e.g.,
perform directly or pay a contractor), the agencies bill FEMA, and FEMA
reimburses them for the work performed using the Intra-Governmental
Payment and Collection (IPAC) system.[Footnote 13] In the case of an
IPAC payment to a performing agency, the IPAC funds transfer occurs
immediately upon request by the agency seeking reimbursement. After the
IPAC is made, FEMA requires that performing agencies provide it
documentation supporting the costs incurred while performing the work
under the mission assignment. FEMA can also reverse or "charge-back"
the payment if it believes the agency did not provide sufficient
supporting documentation. The funding and reimbursement process related
to mission assignments is shown in figure 1.
Figure 1: Funding and Reimbursement Process Related to FEMA Issuing
Mission Assignments to Performing Agencies:
[See PDF for image]
Source: GAO analysis; GAO photograph; Art Explosion illustration.
[A] Performing agencies other than COE use the IPAC system. COE must
submit supporting documentation prior to reimbursement.
[End of figure]
The Government Does Not Have a Framework in Place to Collect and
Consolidate Information to Report on Hurricane-Related Funding:
The federal government is not adequately tracking and reporting on the
use of the $88 billion in hurricane relief and recovery funds provided
thus far to 23 federal agencies in the four emergency supplemental
appropriations acts. First, FEMA does not have mechanisms in place to
collect and report on information from the other agencies that are
performing work on its behalf through mission assignments. As a result,
FEMA's required weekly reports to the Congress have limited usefulness
from a governmentwide perspective. Second, also from a governmentwide
perspective, the federal government does not currently have a framework
or mechanisms in place to collect and consolidate information from the
22 federal agencies in addition to FEMA that have directly received
funding thus far for hurricane relief efforts and report on this
information. Although each federal agency is responsible for tracking
the funds it received, obligations incurred, and funds expended through
it own internal tracking systems, no mechanisms are in place to
consolidate this information. Therefore, it will be difficult for
decision makers to determine how much federal funding has been spent
and by whom, whether more may be needed, or whether too much was
provided.
FEMA's Required Reports Do Not Provide Adequate Information from a
Governmentwide Perspective:
FEMA is required to report weekly to the Appropriations Committees on
the use of funds it received; however, these reports do not provide
timely information from a governmentwide perspective because FEMA does
not have a mechanism in place to collect and report on information from
other agencies which perform work on its behalf. Specifically, when
FEMA tasks another agency through a mission assignment, which is
similar to an interagency agreement for goods and services, FEMA
records the entire amount upfront as an obligation on its reports to
the Congress. The agency performing the task for FEMA does not record
an obligation until a later date when it has actually obligated funds
to carry out its mission, thereby overstating reported governmentwide
obligations. The opposite is true for expenditures. The agency expends
the funds, but then has to bill FEMA for reimbursement. This may happen
months after the actual payment is made. FEMA does not record the
expenditure on its reports to the Congress until it has received the
bill from the performing agency, reviewed it, and recorded the
expenditure in its accounting system, thereby understating reported
governmentwide expenditures.
FEMA's weekly report as of March 29, 2006, shows that of the $36.6
billion received as of that date, it had incurred obligations totaling
$29.7 billion and had made expenditures of $15.9 billion related to
Hurricanes Katrina, Rita, and Wilma.[Footnote 14] Of the $29.7 billion
in obligations, FEMA issued mission assignments to federal agencies
totaling $8.5 billion, or 28.6 percent. The other $21.2 billion
includes, for example, obligations that FEMA made for areas such as the
individual and household program ($7.0 billion) and manufactured
housing ($4.7 billion), which are being reviewed in some respects by
other auditors. As of March 29, 2006, FEMA reported approximately $8.5
billion of obligations for mission assignments and approximately $661
million of expenditures for Hurricanes Katrina, Rita, and Wilma as
shown in table 2.
Table 2: Mission Assignment Obligations and Expenditures Reported by
FEMA for Hurricanes Katrina, Rita, and Wilma, as of March 29, 2006:
Dollars in millions.
Agency: COE;
Obligations reported by FEMA: $4,927.8;
Expenditures reported by FEMA: $351.6.
Agency: DOD;
Obligations reported by FEMA: 1,176.7;
Expenditures reported by FEMA: 210.0.
Agency: Department of Transportation;
Obligations reported by FEMA: 506.8;
Expenditures reported by FEMA: 45.4.
Agency: DHS (excluding FEMA);
Obligations reported by FEMA: 552.6;
Expenditures reported by FEMA: 8.0.
Agency: Environmental Protection Agency;
Obligations reported by FEMA: 366.9;
Expenditures reported by FEMA: 6.9.
Agency: Department of Health and Human Services;
Obligations reported by FEMA: 274.2;
Expenditures reported by FEMA: 0.0.
Agency: U.S. Forest Service;
Obligations reported by FEMA: 365.0;
Expenditures reported by FEMA: 0.0.
Agency: General Services Administration;
Obligations reported by FEMA: 78.7;
Expenditures reported by FEMA: 0.3.
Agency: HUD;
Obligations reported by FEMA: 83.0;
Expenditures reported by FEMA: 32.4.
Agency: Department of Justice;
Obligations reported by FEMA: 55.2;
Expenditures reported by FEMA: 3.1.
Agency: Department of Labor;
Obligations reported by FEMA: 21.6;
Expenditures reported by FEMA: 0.0.
Agency: Other agencies;
Obligations reported by FEMA: 89.0;
Expenditures reported by FEMA: 3.1.
Total;
Obligations reported by FEMA: $8,497.5;
Expenditures reported by FEMA: $660.8.
Source: GAO analysis of FEMA Weekly Disaster Relief Finance Report to
the Appropriations Committees, dated March 29, 2006.
[End of table]
FEMA Needs to Clarify Reported Obligations for Work Performed by Other
Federal Agencies:
While FEMA reports obligations based on the dollar amount of the
mission assignments it has placed with other federal agencies when they
are assigned, these obligation amounts do not represent the amount of
funds that the agencies have, in turn, actually obligated to perform
disaster relief work on behalf of FEMA. In some cases, the agencies
have obligated tens or hundreds of millions of dollars less than the
amount reported by FEMA.
Our analysis of FEMA's reported mission assignments to other federal
agencies to perform work on behalf of FEMA in the amount of $8.5
billion identified two types of reporting problems, both of which
resulted in FEMA's obligations being overstated from a governmentwide
perspective. First, some federal agencies recorded obligations in their
internal tracking systems that were much less than the amount of
obligations reported by FEMA. This occurred because FEMA's recorded
obligations are based on the dollar amount of the entire mission
assignment. In contrast, the amount of obligations recorded by federal
agencies is the amount of funds they actually obligated to perform
disaster relief work. The performing agency does not incur obligations
until it actually performs or contracts for the work. Four examples of
this reporting problem follow:
* On September 28, 2005, FEMA's report showed that obligations on
mission assignments issued to DOD related to Hurricane Katrina totaled
about $2.2 billion. As of March 2006, this amount had been
substantially reduced twice. On November 3, 2005, FEMA amended the
mission assignment and reduced the amount to about $1.7 billion, and it
reduced the amount again on March 15, 2006, to about $1.1 billion.
While FEMA was reporting obligations as high as $2.2 billion during
this 6-month period, DOD's reports[Footnote 15] show that it incurred
only $481 million of actual obligations as of April 5, 2006--hundreds
of millions of dollars less than what FEMA reported over the same 6-
month period. According to a DOD official, it is currently reviewing
the mission assignments and will be returning obligational authority
that was not used to FEMA.
* On September 28, 2005, FEMA's report showed that obligations on
mission assignments issued to COE related to Hurricane Katrina were
about $3.3 billion. Since then, this amount has increased. On October
20, 2005, FEMA amended and increased the mission assignment amounts to
about $3.7 billion and on April 5, 2006, to about $4 billion. However,
according to COE's internal records as of April 7, 2006, it had
actually obligated about $3 billion for Hurricane Katrina work, a
difference of over $1 billion.
* Based on information provided by the Coast Guard, FEMA had recorded
mission assignment obligations related to Hurricanes Katrina and Rita
in the amount of nearly $192 million as of April 2006. However, at that
time, the Coast Guard had only actually incurred about $85 million in
obligations. Thus, the difference between what FEMA reported to the
Congress and what Coast Guard information showed it had actually
obligated is approximately $107 million.
* Based on information provided by the Department of Housing and Urban
Development (HUD), at the end of March 2006, FEMA had obligated and
reported approximately $83 million for HUD mission assignments related
to Hurricane Katrina. However, HUD had only incurred about $47 million
in obligations for work to be done under mission assignments. While HUD
may eventually utilize the full amount obligated by FEMA, at that time,
there was an approximately $36 million difference between the amounts
FEMA reported as obligated for HUD and what HUD had actually obligated.
HUD expects final reconciliation to be completed by December 2006.
Second, at least three federal agencies we interviewed did not have
mission assignments recorded in their internal tracking systems that
were recorded in FEMA's system. According to the officials from certain
federal agencies, this occurred because the agency's financial
management office was not informed of the mission assignments. FEMA
officials informed us that this problem likely occurred because, while
the agencies' program offices appropriately received mission assignment
information from FEMA, those agencies' program offices did not properly
provide the information to their agencies' financial management
offices. Two examples of this reporting problem follow:
* At the Department of Health and Human Services, we noted $90 million
in mission assignment obligations related to Hurricane Katrina or
amendments to those obligations that were reported by FEMA as of
January 18, 2006, but not recorded by the department's financial
management office as of February 24, 2006. The department told us that
these mission assignments or amendments had been issued by FEMA, but
had not been received by the department's program or financial
management offices. After we pointed out the discrepancies, the two
agencies reconciled the differences.
* In another case, the Environmental Protection Agency had a similar
situation involving $11.5 million in mission assignments and amendments
related to Hurricane Katrina for which it did not record obligations as
of March 2006 because the financial management office was unaware the
mission assignments had been made by FEMA. According to the
Environmental Protection Agency, for $10 million of the $11.5 million
in mission assignments, not only was the financial management office
unaware but the agency had never been informed that the mission
assignment had been issued by FEMA.
FEMA's Reports Do Not Provide Adequate Information on Actual
Expenditures Made by Other Federal Agencies:
A different set of issues arises with regard to expenditure data.
Because of the nature and timing of payments FEMA makes to performing
agencies, FEMA's reported expenditures from the Disaster Relief Fund do
not present an accurate status of federal spending for hurricane relief
and recovery from a governmentwide perspective. This is explained in
part by problems with the timeliness and adequacy of billings to FEMA
by other agencies. As previously explained, FEMA reimburses performing
agencies for work they perform on behalf of FEMA in accordance with the
mission assignment agreements. FEMA requires that performing agencies
(1) bill it within 90 days after completion or upon termination of a
mission assignment, and (2) provide a certain level of documentation
for its review in order for the billings to be approved. FEMA does not
recognize reimbursements to other agencies as expenditures in its
accounting system (and therefore in its reports to the Congress) until
this approval has occurred. From a governmentwide perspective, this
process results in FEMA's expenditures being understated.
As of March 29, 2006, FEMA reported about $661 million of expenditures
to agencies performing mission assignments for Hurricanes Katrina,
Rita, and Wilma (see table 2). However, performing agencies' internal
tracking systems showed a significantly higher level of expenditures on
their mission assignments. The process FEMA uses for reimbursing
performing agencies creates timing differences between FEMA's and the
performing agencies' records. As a result, FEMA's reported expenditures
are less than actual expenditures performing agencies have made in
support of FEMA's hurricane relief and recovery efforts. In the case of
a mission assignment, a performing agency would recognize an
expenditure when that agency pays costs (liquidates obligations) to
employees, contractors, or other outside entities for work performed.
However, FEMA does not recognize the reimbursement of these costs as an
expenditure until it has reviewed and approved a bill from the
performing agency. With the exception of COE, reimbursements to the
performing agencies are made using the IPAC system. While the IPAC
funds transfer occurs immediately upon request by the agency seeking
reimbursement, in FEMA's accounting records the IPAC transaction would
be reflected as a suspense account transaction until FEMA has received
and approved the supporting documentation for the IPAC billing.
Therefore, by virtue of the timing delays, FEMA's reported expenditures
would be less than expenditures made and reported by performing
agencies and a user of FEMA's report could incorrectly infer that a
particular agency has received tasks from FEMA but has not spent any of
the funds. Thus, the cost of actual work performed is better reflected
by the performing agencies. Two examples follow:
* FEMA's report as of March 29, 2006, showed that approved mission
assignment expenditures (cash reimbursements) related to Hurricane
Katrina were about $210 million for DOD. However, DOD's report as of
April 5, 2006, showed that it had already received $324 million in
reimbursement from FEMA for mission assignments related to Hurricane
Katrina.[Footnote 16]
* The U.S. Forest Service had not billed FEMA for any of its work done
under mission assignments even though the agency reported that it had
made close to $170 million in expenditures related to its Hurricane
Katrina mission assignments as of January 31, 2006. Accordingly, FEMA
reported no expenditures for this agency in its weekly report since
FEMA had not yet approved any billings. FEMA's billing instructions
state that reimbursement requests can be forwarded to FEMA monthly,
regardless of the amount. Also, agencies should submit the final bill
no later than 90 days after completion or upon termination of the
mission assignment. The Forest Service, however, was not doing this,
and as a result, FEMA did not report any expenditures for mission
assignment work performed by the Forest Service as of March 29, 2006,
even though the Forest Service had spent about $170 million. The Forest
Service explained that it billed FEMA in March and June 2006 and
planned to issue additional bills in August and September 2006. We
noted that there had been some billing activity reported by FEMA
subsequent to March 29, 2006.
Aside from the timing issues discussed above, some performing agencies
have not provided billing documentation that meets FEMA's requirements
to support their reimbursements for work performed on mission
assignments. Although performing agencies using the IPAC system receive
funds immediately upon requesting reimbursement, if upon review of
supporting reimbursement documents, FEMA officials determine that some
amounts are incorrect or unsupported, FEMA may retrieve or "charge
back" the monies from these agencies through the IPAC system. For
example, travel charges should be supported by a breakdown by object
class with names, period of performance dates, and amounts. Failure to
submit this documentation may result in FEMA charging back the agency
for the related mission assignment billing. FEMA's records as of May
15, 2006, showed that FEMA had "charged back" about $267 million from
performing agencies for costs billed to FEMA for mission assignments
related to Hurricanes Katrina, Rita, and Wilma. About $260 million, or
over 97 percent, of these charge-backs involved five agencies: the
Department of Transportation ($102 million), DOD ($57 million), the
Environmental Protection Agency ($45 million), the Federal Protective
Service within DHS ($32 million), and the Department of Health and
Human Services ($24 million). Consistent with its practice of only
reporting approved expenditures, these amounts were not recognized as
expenditures by FEMA, even though the performing agencies claim they
have expended those amounts. In addition, until FEMA requested the
charge-backs, the billings would have been in a FEMA suspense account,
and would have temporarily depleted monies from the Disaster Relief
Fund since the agencies had already received reimbursement through the
IPAC system. At least one agency, DOD, has indicated that it is trying
to gather additional supporting documentation for the $57 million that
FEMA charged back. Therefore, at least part of these charged back funds
may be reported as expenditures by FEMA at some point in the future. If
the agency cannot provide FEMA the needed supporting documentation, the
agency may not be reimbursed and thus will be required to use its own
appropriations.
FEMA is also experiencing billing problems with COE, which does not use
the IPAC system. According to FEMA personnel, COE had billing and
documentation problems in the past and was not permitted to use the
IPAC system for transactions with DHS. While COE was working on gaining
access to using the IPAC system prior to Hurricane Katrina, this
process was put on hold, and instead COE must manually submit
supporting documentation before FEMA reimburses its mission assignment
costs. This allows for a thorough review by FEMA, but has also led to
payment delays. As of February 6, 2006, COE's internal accounts
receivable report showed that it had not received reimbursement for
about $1.2 billion of bills submitted to FEMA for Hurricane Katrina
mission assignments even though COE officials stated that they had sent
documentation supporting the majority of the bills. Of that amount,
about $610 million, or over half of the total, was over 60 days old.
According to FEMA officials, as of April 7, 2006, it had not received
documentation supporting about $800 million of the $1.2 billion of
outstanding accounts receivable on COE's records. None of the $1.2
billion has been reported as expenditures by FEMA, although COE reports
these amounts as expenditures.
Lack of Framework to Collect and Consolidate Agency Data and Report on
This Information Limits Ability to Assess Status of Hurricane Funding:
From a governmentwide perspective, since Hurricane Katrina made
landfall, about $88 billion through four emergency supplemental
appropriations has been appropriated to 23 federal agencies. We found
that no one agency or central collection point exists to compile and
report on how these funds are being spent. Without a framework and
mechanisms in place to collect and consolidate information from these
agencies and report on a periodic basis, decision makers will not have
complete and consistent information on the uses of the funding that has
been provided thus far. Information on the amount of obligations and
expenditures[Footnote 17] made on the actual relief and recovery effort
would provide decision makers information they can use to determine,
for example, if (1) additional funds should be provided for the relief
and recovery work, (2) the funds already provided could be deemed
excess and used for other disaster relief and recovery work, (3) funds
should be rescinded, or (4) duplicate programs are providing similar
assistance. As a result, in order to have governmentwide information on
actual obligations incurred and expenditures made on the relief and
recovery effort, the agencies would have to use their own internal
tracking systems to extract this information and provide the
information to a central point, where the data could be consolidated
and reported. The ability to separately track and report on these funds
is important to help ensure better accountability and clearly identify
the status of funding provided in direct response to these hurricanes
at both the individual federal agency level as well as the
governmentwide level and to provide additional transparency so that
hurricane victims, affected states, as well as American taxpayers, know
how the government is spending these funds. At the same time, we
recognize the substantial challenge in balancing the need to get money
out quickly to those who are actually in need and sustaining public
confidence in disaster programs by taking all possible steps to
minimize fraud and abuse.
Although each federal agency is responsible for tracking the funds it
received, obligations incurred, and funds expended through its own
internal tracking systems, no mechanisms are in place to consolidate
and report on this information. Of the approximately $88 billion
provided as of June 2006, FEMA received about $42.6 billion ($66
billion appropriated less the $23.4 billion rescinded) for the Disaster
Relief Fund and 22 other agencies received the remaining $45.4 billion.
Once these funds are appropriated, they are merged into, and commingled
with existing appropriation accounts.[Footnote 18] OMB Circular No. A-
11[Footnote 19] requires agencies to report obligations and outlays on
a quarterly basis at the appropriation level; however, those reports on
budget execution and budgetary resources do not call for separately
identifying amounts on a programmatic basis, such as hurricane relief
and recovery efforts. Thus, reporting under this Circular will not
provide the information needed to monitor the status of hurricane-
related funding. Although FEMA was required to provide weekly reports
to the Congress on obligation and expenditure information on the $42.6
billion it received (although with limited usefulness as discussed
previously), most of the other 22 agencies that received over $45
billion would only be responsible for tracking this information
internally.
While there are some reporting requirements included in the emergency
supplemental appropriation acts, overall reporting requirements differ
greatly. Also, the reporting requirements do not call for consolidating
information on obligations and expenditures on a governmentwide basis
and, therefore, do not facilitate governmentwide reporting on hurricane-
related spending. The reporting requirements that were included for the
various agencies ranged from very detailed reporting to no reporting at
all. For example, while FEMA was required to report obligations and
expenditures, 16 other federal agencies did not have any reporting
requirements. See appendix II for more information on the reporting
requirements included in the first four emergency supplemental
appropriations acts.
Given that consolidated governmentwide reporting will require that
financial information be compiled from 23 different agencies, an entity
that regularly collects and compiles information from different
agencies, such as OMB or the Department of the Treasury, would likely
be in the best position for requesting this information and preparing
consolidated governmentwide reporting on hurricane-related funding.
Other options would be for either FEMA or the Office of the Federal
Coordinator for Gulf Coast Rebuilding[Footnote 20] to compile this
information.
Conclusions:
Success in the rebuilding efforts of the Gulf Coast area is critical.
The federal government has already invested billions of dollars for
this effort with more likely to come. Although FEMA is required to
report on obligations and expenditures, these reports do not provide
timely information from a governmentwide perspective. In addition,
there is no framework or mechanisms in place to collect and consolidate
information, and to report on the $88 billion in hurricane relief and
recovery funds provided thus far to 23 federal agencies in the four
emergency supplemental appropriations acts on a governmentwide basis.
The government's progress in the rebuilding efforts will be difficult
to measure if decision makers do not know how much has been spent, what
for, how much has been obligated but not yet spent, and how much more
is still available. Without consistent, reliable, and timely
governmentwide information on the use of this funding, the agencies and
the Congress could lose visibility over these funds and not know the
extent to which they are being used to support hurricane relief and
recovery efforts. With rebuilding efforts likely to take many years, it
is important that the federal government fulfill its role as steward of
taxpayer funds and provide transparency to the affected states and
victims, and account for and report on all funds received for the
hurricane-related efforts.
Recommendations for Executive Action:
To improve the information on the status of hurricane relief and
recovery funds provided in FEMA's weekly reports to the Appropriations
Committees from a governmentwide perspective, we recommend that the
Secretary of Homeland Security direct the Director of FEMA to take the
following four actions:
* Explain in the weekly reports how FEMA's reported obligations and
expenditures for mission assignments do not reflect the status from a
governmentwide perspective.
* On an established basis (e.g., monthly or quarterly), request and
include actual obligation and expenditure data from agencies performing
mission assignments.
* Include in the weekly report amounts reimbursed to other agencies
that are in suspense because FEMA has not yet reviewed and approved the
documentation supporting the expenditures.
* Reiterate to agencies performing mission assignments its policies on
(1) the detailed information required in supporting documentation for
reimbursements, and (2) the timeliness of agency billings.
To help ensure better accountability, provide additional transparency,
and clearly identify the status of the hurricane-related funding
provided by emergency supplemental appropriations at both the
individual federal agency level as well as the governmentwide level, we
recommend that the Director, Office of Management and Budget, establish
a framework for governmentwide reporting on the status of the hurricane-
related funding. OMB could either collect and consolidate this
information itself or designate another appropriate agency, such as the
Department of the Treasury, to do so and report to the Appropriations
Committees on a periodic basis.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Secretary of
Homeland Security and the Director of OMB. These comments are reprinted
in appendixes III and IV, respectively. While DHS concurred with our
recommendations, it also stated that it believes our recommendation to
periodically request and include actual obligation and expenditure data
from agencies performing mission assignments is subsumed by our
recommendation to OMB to establish a framework for governmentwide
reporting on the status of hurricane-related funding. We believe our
recommendation is still valid for FEMA since, as stated in the agency's
response, its mission assignments are a significant component in the
establishment of a framework for governmentwide reporting on the status
of hurricane-related funding. However, as the intent of our
recommendation is to help ensure the Congress is receiving complete,
timely, useful, and reliable reports, we agree that other alternatives
could be considered to achieve the same objectives. OMB agreed that
there should be clear accountability and transparency on the spending
of emergency funds for hurricane relief and indicated it will fully
consider our recommendation to establish a new framework for
governmentwide reporting on the status of disaster-related funding.
We also provided excerpts of the report to those agencies cited in
examples for their review. They provided technical comments, and we
made revisions as appropriate.
We are sending copies of this report to other interested congressional
committees and to affected federal agencies. Copies will be made
available to others upon request. In addition, this report will also be
available at no charge on GAO's home page at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-9095 or at williamsm1@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made contributions
to this report are listed in appendix V.
Signed by:
McCoy Williams:
Director, Financial Management and Assurance:
List of Committees:
The Honorable Susan M. Collins:
Chairman:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Coburn:
Chairman:
The Honorable Thomas R. Carper:
Ranking Minority Member:
Subcommittee on Federal Financial Management, Government Information,
and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Peter T. King:
Chairman:
The Honorable Bennie G. Thompson:
Ranking Minority Member:
Committee on Homeland Security:
House of Representatives:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Martin Olav Sabo:
Ranking Minority Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To determine whether the federal government was tracking and reporting
on the use of funding provided in the four emergency supplemental
appropriations acts, we obtained and analyzed the four emergency
supplemental appropriation documents and conference reports. We also
obtained the reports prepared by the Federal Emergency Management
Agency (FEMA) and the Army Corps of Engineers (COE) in response to the
second emergency supplemental appropriation act. We did not obtain the
reports required by the third or fourth emergency supplemental
appropriations acts since this was a new requirement for the federal
agencies. In addition, we obtained and analyzed guidance on reporting
of estimates of hurricane-related funding budget authority, outlays,
and receipts, issued by the Office of Management and Budget (OMB) in
2005 and discussed this guidance with officials from OMB.
To determine whether FEMA's reports to the Appropriations Committees
required by the second emergency supplemental appropriation act
provided timely and useful information, we obtained and analyzed the
weekly reports prepared by FEMA, specifically focusing on the
obligations and expenditures reported for mission assignments to
agencies performing disaster relief work related to Hurricane Katrina
on behalf of FEMA because they have governmentwide implications. We met
with FEMA officials to discuss (1) the definitions of the terms
obligations and expenditures used in the report, (2) the process of
FEMA issuing mission assignments to agencies and the obligation of
FEMA's funds related to the mission assignments, and (3) the process of
agencies seeking reimbursement for goods and services provided in
response to the disaster relief work including FEMA's billing
procedures. We also obtained and analyzed certain federal agencies'
reports that provide information on mission assignments, obligations
incurred and expenditures made in performing disaster relief work on
behalf of FEMA, amount of bills submitted to FEMA, and amount of bills
paid by FEMA. Because the majority of FEMA's mission assignment
obligations related to Hurricane Katrina, we focused our review at the
agencies on the Hurricane Katrina mission assignments. We met with
officials from certain federal agencies to discuss the information
contained in these reports.
In performing our work, we obtained information from the:
* OMB,
* Department of the Treasury,
* FEMA,
* Department of Defense,
* COE,
* Department of Transportation,
* Environmental Protection Agency,
* Department of Health and Human Services,
* U.S. Forest Service,
* General Services Administration, and:
* Department of Housing and Urban Development.
To assess the reliability of the data, we interviewed officials
knowledgeable about the data and determined that the data were
sufficiently reliable for the purposes of this report. We conducted our
work from October 2005 through June 2006 in accordance with generally
accepted government auditing standards.
We provided a draft of this report to the Department of Homeland
Security (DHS) and OMB for comment. DHS and OMB provided written
comments, which are presented in the Agency Comments and Our Evaluation
section of this report and are reprinted in appendixes III and IV,
respectively. We also provided excerpts of the report to those agencies
cited in examples for their review. They provided technical comments,
and we made revisions as appropriate.
[End of section]
Appendix II: Reporting Requirements Included in the Four Emergency
Supplemental Appropriations Acts:
The four emergency supplemental appropriations acts enacted as of June
2006 provided funds to 23 federal agencies[Footnote 21] for the
hurricane relief and recovery effort and included different reporting
requirements. In addition, of the 23 agencies receiving appropriations
in the four emergency supplemental appropriations acts, 16 agencies did
not have any reporting requirements.
The first two emergency supplemental appropriations acts[Footnote 22]
provided funding to the Federal Emergency Management Agency (FEMA),
Department of Defense (DOD), and Army Corps of Engineers (COE), and
included the following reporting requirements:
* The first emergency supplemental appropriation act did not contain
any requirements for FEMA to report on the $10 billion it received. The
second emergency supplemental appropriation act required the Secretary
of Homeland Security to provide, at a minimum, a weekly report to the
Appropriations Committees detailing the allocation and obligation of
the $50 billion in appropriated funds it received for Hurricane Katrina
in the second emergency supplemental appropriation act. The fiscal year
2006 Department of Homeland Security Appropriations Act[Footnote 23]
further explained that this weekly report was to include other
information such as obligations, allocations, and expenditures,
categorized by agency and state.
* COE was not provided any funding in the first emergency supplemental
appropriation. The second emergency supplemental appropriation act
required COE to provide a weekly report to the Appropriations
Committees detailing the allocation and obligation of $400 million in
appropriated funds it received under that act.
* There was no requirement for DOD to report on the $1.9 billion it
received in the first and second emergency supplemental appropriations
acts.
The third emergency supplemental appropriation act provided $29 billion
directly to 20 individual federal agencies and rescinded approximately
$23.4 billion from the amount initially appropriated to FEMA's Disaster
Relief Fund in September 2005. The third emergency supplemental
appropriation act included differing reporting requirements for each of
the 20 federal agencies ranging from none to very detailed.
Illustrative examples from the third emergency supplemental
appropriation act and the conference report[Footnote 24] accompanying
this legislation include the following specific reporting requirements:
* The third emergency supplemental appropriation act required each
state receiving monies through the Community Development Fund from the
Department of Housing and Urban Development (HUD) to report quarterly
to the Appropriations Committees for all awards and uses of funds. The
supplemental appropriation language also required some additional
reporting from HUD, such as reporting quarterly to the Appropriations
Committees with regard to all steps taken to prevent fraud and abuse of
funds made available.
* The conference report accompanying the third emergency supplemental
appropriation act directed the Secretary of Defense to submit quarterly
reports to the congressional defense committees including, among other
things, the expenditures of funds it received for hurricane relief and
recovery operations. This did not include retroactive requirements for
the first and second emergency supplemental appropriations. The
conference report also directed the Secretary of Agriculture to provide
quarterly reports including, among other things, the expenditures of
funds received for hurricane relief. It also requested the Department
of Education to submit a report by March 1, 2006, on the obligation and
allocation of funds it received for hurricane relief and provided to
assist college students under the Higher Education Act. The reporting
requirements for some agencies were more detailed than others. Also,
these reporting requirements do not cover funding authority of
approximately $8.5 billion that agencies received through FEMA's
mission assignment process for Hurricanes Katrina, Rita, and Wilma as
of March 29, 2006.
The fourth emergency supplemental appropriation act provided
approximately $20.1 billion directly to 22 individual federal agencies.
This legislation did not include any new reporting requirements for the
agencies receiving funding; however, the act contained reporting
requirements for HUD that were consistent with the requirements
outlined in the third emergency supplemental appropriation act.
[End of section]
Appendix III: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
August 30, 2006:
Mr. McCoy Williams:
Director Financial Management and Assurance:
Government Accountability Office:
Washington, DC 20548:
Re: GAO-06-834 Disaster Relief: Government wide Framework Needed to
Collect and Consolidate Information to Report on Billions in Federal
Funding for the 2005 Gulf Coast Hurricanes.
Thank you for the opportunity to review the draft report. The following
represents the Department of Homeland Security response to the
recommendations contained in GAO's draft report.
FEMA agrees with the GAO conclusions that its reports on the status of
hurricane relief and recovery funds provided to the Appropriations
Committees do not reflect a governmentwide perspective and the GAO
recommendations to improve the information reported. It should be noted
that FEMA as an organization does not have a governmentwide reporting
role of the nature envisioned by GAO; thus it is understandable why its
reports would reflect information from just its accounting system.
While we agree with the intent of Recommendation 2, we believe it is
best addressed to OMB.
Recommendation:
Explain in the weekly reports how FEMA's reported obligations and
expenditures for mission assignments do not reflect the status from a
governmentwide perspective.
Response: Concur. FEMA will provide language in its reports to the
Appropriations Committees to explain that the financial information
reflects what is recorded in FEMA's records and not the obligations and
expenditures shown in the performing agencies records.
Recommendation:
On an established basis (e.g., monthly or quarterly), request and
include actual obligation and expenditure data from agencies performing
mission assignments.
Response: Generally concur. FEMA believes that Recommendation 2 is
subsumed by Recommendation 5 where GAO recommends that the Director,
Office of Management and Budget (OMB) establish a framework for
government wide reporting on the status of the hurricane-related
funding. FEMA and the agencies performing its mission assignments are
significant components in the establishment of a framework for
governmentwide reporting on the status of hurricane-related funding.
Given this, we believe that the creation of the data collection,
consolidation, and reporting process and policy should include and
involve all federal agencies involved with the funding.
As a separate DHS element FEMA has its own accounting system and as GAO
has clearly presented, it has reported information it is required to
record in its system to the Appropriation Committees weekly -but this
information does not reflect a governmentwide perspective. FEMA will
work with OMB or its designee to establish the reporting framework that
GAO is recommending.
Recommendation:
Include in the weekly report amounts reimbursed to other agencies that
are in suspense because FEMA has not yet reviewed and approved the
documentation supporting the expenditures.
Response: Concur. FEMA will alter its reporting to include amounts in
suspense.
Recommendation:
Reiterate to agencies performing mission assignments its policies on
(1) the detailed information required in supporting documentation for
reimbursements, and (2) the timeliness of agency billings.
Response: Concur. FEMA will remind agencies performing mission
assignments about its policies regarding supporting documentation and
timeliness of agency billings.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix IV: Comments from the Office of Management and Budget:
The Controller:
Executive Office Of The President:
Office Of Management And Budget:
Washington D. C. 20509:
AUG 31 2Q06:
Mr. McCoy Williams:
Director, Financial Management and Assurance:
United States Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Williams:
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) draft report GAO-06-834, Governmentwide
Framework Needed to Collect and Consolidate Information to Report on
Billions in Federal Funding for the 2005 Gulf Coast Hurricanes.
The Office of Management and Budget (OMB) agrees that there should be
clear accountability and transparency on the spending of the funds
provided by emergency supplemental appropriations for the hurricane
relief efforts. This transparency is vital to assuring those
individuals directly affected by the hurricanes, and the American
taxpayers, that the appropriated funds were spent appropriately for
hurricane relief efforts, and provided in a timely manner.
OMB has been monitoring the use of the appropriated funds, as part of
our oversight role of Federal spending, and will continue monitoring
throughout the recovery and reconstruction of the Gulf Coast.
Specifically, OMB has collected data on agency obligations and outlays
related to Katrina supplemental funding and plans to issue periodic
updates on the status of these funds. In addition, we will fully
consider GAO's recommendation to establish a new framework for
government-wide reporting on the status of disaster-related funding.
Again, we appreciate the opportunity to respond to this report. If you
have any additional questions or comments, please feel free to contact
Danny Werfel in the Office of Federal Financial Management at 202-395-
3993.
Sincerely,
Signed by:
Linda M. Combs:
Controller:
[End of section]
Appendix V GAO Contact and Staff Acknowledgments:
GAO Contact:
McCoy Williams, (202) 512-9095 or williamsm1@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, the following individuals also
made significant contributions to this report: Christine Bonham,
Richard Cambosos, Thomas Dawson, Francine DelVecchio, Heather Dunahoo,
Abe Dymond, Gabrielle Fagan, Casey Keplinger, Stephen Lawrence, Greg
Pugnetti, Lori Ryza, and Natalie Schneider. Other contributions were
made by Felicia Brooks, Eric Essig, Lauren Fassler, Barry Grinnell,
John Hong, James Maziasz, Patrick McCray, Shalin Pathak, and Chanetta
Reed.
FOOTNOTES
[1] Pub. L. No. 109-61, 119 Stat. 1988 (Sept. 2, 2005); Pub. L. No. 109-
62, 119 Stat. 1990 (Sept. 8, 2005); Pub. L. No. 109-148, div. B, 119
Stat. 2680, 2745 (Dec. 30, 2005); and Pub. L. No. 109-234, title II,
120 Stat. 443, 474 (June 15, 2006). Other funding has been provided,
but it was not included in the emergency supplemental appropriations.
[2] 42 U.S.C. §§ 5121-5206. The Stafford Act authorizes federal
agencies to take actions such as disaster response, recovery, and
mitigation assistance to supplement state and local efforts once the
President has issued a major disaster declaration. The Federal
Emergency Management Agency (FEMA), within the Department of Homeland
Security (DHS), is responsible for administering the major provisions
of the Stafford Act.
[3] The NRP is intended to be an all-discipline, all-hazards plan that
establishes a single, comprehensive framework for the management of
domestic incidents. It provides the structure and mechanisms for the
coordination of federal support to state, local, and tribal incident
managers and for exercising direct federal authorities and
responsibilities.
[4] FEMA prepares these weekly reports and forwards them to DHS for
transmittal. For purposes of this report, we consider this to be a
reporting requirement for FEMA.
[5] FEMA's weekly reports were posted on the House Appropriations
Committee's website at http://appropriations.house.gov/_files/
HurricaneKatrinaLink.htm (downloaded May 25, 2006).
[6] For purposes of this report, we are considering the Department of
Agriculture and the U.S. Forest Service two separate agencies because
the Forest Service received a large portion of the mission assignments
for the Department of Agriculture. We are also considering the
Department of Defense (DOD) and the Army Corps of Engineers (COE) two
separate agencies because of the large portion of the total mission
assignments they each received as well as the fact that COE does not
use the Intra-Governmental Payment and Collection (IPAC) system. In
addition, for purposes of this report, we are considering FEMA's
Disaster Relief Fund separate from other DHS appropriations because of
the specific function of the Disaster Relief Fund for Stafford Act
activities.
[7] See GAO, Agency Management of Contractors Responding to Hurricanes
Katrina and Rita, GAO-06-461R (Washington, D.C.: Mar. 16, 2006); GAO,
Hurricane Katrina: Comprehensive Policies and Procedures Are Needed to
Ensure Appropriate Use of and Accountability for International
Assistance, GAO-06-460 (Washington, D.C.: Apr. 6, 2006); GAO, Expedited
Assistance for Victims of Hurricanes Katrina and Rita: FEMA's Control
Weaknesses Exposed the Government to Significant Fraud and Abuse, GAO-
06-655 (Washington, D.C.: June 16, 2006); and GAO, Hurricane Katrina:
Better Plans and Exercises Needed to Guide the Military's Response to
Catastrophic Natural Disasters, GAO-06-643 (Washington, D.C.: May 15,
2006).
[8] Pub. L. No. 109-62, 119 Stat. 1990, 1991-1992 (Sept. 8, 2005). The
act required the Secretary of Homeland Security to provide, at a
minimum, a weekly report detailing the allocation and obligation of
appropriations made under the act.
[9] A mission assignment is a tasking issued by FEMA, directing other
federal agencies and components of DHS, or "performing agencies," to
perform work on its behalf to respond to a Stafford Act event under the
NRP.
[10] 6 U.S.C. § 317(a)(1).
[11] Pub. L. No. 109-61, 119 Stat. 1988 (Sept. 2, 2005) and Pub. L. No.
109-62, 119 Stat. 1990 (Sept. 8, 2005). These two emergency
supplemental appropriations were to meet immediate needs arising from
the consequences of Hurricane Katrina for the fiscal year ending
September 30, 2005.
[12] Pub. L. No. 109-148, div. B, 119 Stat. 2680, 2745 (Dec. 30, 2005).
This emergency supplemental appropriation was to address hurricanes in
the Gulf of Mexico for the fiscal year ending September 30, 2006.
[13] The IPAC system, a collection system operated by the Department of
the Treasury, is one of the major components of the Government On-Line
Accounting Link System II. The IPAC application's primary purpose is to
provide a standardized interagency fund transfer mechanism. IPAC
facilitates the intragovernmental transfer of funds. Performing
agencies, except for COE, use the IPAC system.
[14] Although FEMA's weekly report presents information on Hurricanes
Katrina, Rita, and Wilma, because the majority of FEMA's mission
assignment obligations related to Hurricane Katrina, we focused our
review at the performing agencies on the Hurricane Katrina mission
assignments.
[15] DOD's report showed that it had obligated a total of $638 million
as of April 5, 2006. However, $157 million of the $638 million was for
FEMA-requested work not formally ordered through a mission assignment.
[16] DOD's report showed that it received a total of about $481 million
from FEMA as of April 5, 2006. However, $157 million of the $481
million was for FEMA requested work not formally ordered through a
mission assignment.
[17] An expenditure is an outlay. Generally, an outlay is the issuance
of checks, disbursement of cash, or electronic transfer of funds made
to liquidate a federal obligation.
[18] Unless otherwise specified by law, emergency supplemental
appropriations are merged into, and commingled with existing
appropriation accounts. This was the case for the four emergency
supplemental appropriations acts enacted thus far.
[19] OMB Circular No. A-11, Preparation, Submission, and Execution of
the Budget (revised June 2006).
[20] The Office of the Federal Coordinator for Gulf Coast Rebuilding is
responsible for developing a long-term rebuilding plan for the region
in the aftermath of Hurricanes Katrina, Rita, and Wilma; coordinating
the federal efforts; and helping state and local officials reach
consensus on their vision for the region.
[21] For purposes of this report, we are considering the Department of
Agriculture and the U.S. Forest Service two separate agencies because
the Forest Service received a large portion of the mission assignments
for the Department of Agriculture. We are also considering the
Department of Defense (DOD) and the Army Corps of Engineers (COE) two
separate agencies because of the large portion of the total mission
assignments they each received as well as the fact that COE does not
use the Intra-Governmental Payment and Collection (IPAC) system. In
addition, for purposes of this report, we are considering FEMA's
Disaster Relief Fund separate from other Department of Homeland
Security (DHS) appropriations because of the specific function of the
Disaster Relief Fund for Stafford Act activities.
[22] Pub. L. No. 109-61 and Pub. L. No. 109-62.
[23] Pub. L. No. 109-90, 119 Stat. 2090 (Oct. 18, 2005).
[24] See H.R. Conf. Rep. No. 109-359, Div. B, at 488 (Dec. 18, 2005).
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